Fed’s Beige Book: Economic activity was little changed overall in April and early May

According to Federal Reserve’s Beige Book, “economic activity was little changed overall in April and early May”. The expectations for future growth deteriorated a little, “though contacts still largely expected a further expansion in activity.”ç

“Employment increased in most Districts, though at a slower pace than in previous reports”, said the Beige Book. On Friday, the Nonfarm payrolls report is due. 

The reaction in the currency market to the Beige Book was muted. The US Dollar continued to trim losses, affected by comments from Federal Reserve officials Harker and Jefferson, who suggested that they will vote to keep rates unchanged at the next meeting. 

Key takeaways from the Beige Book: 

“Economic activity was little changed overall in April and early May. Four Districts reported small increases in activity, six no change, and two slight to moderate declines. Expectations for future growth deteriorated a little, though contacts still largely expected a further expansion in activity. Consumer expenditures were steady or higher in most Districts, with many noting growth in spending on leisure and hospitality. Education and healthcare organizations saw steady activity on balance.”

“Employment increased in most Districts, though at a slower pace than in previous reports. Overall, the labor market continued to be strong, with contacts reporting difficulty finding workers across a wide range of skill levels and industries.”

“Prices rose moderately over the reporting period, though the rate of increase slowed in many Districts. Contacts in most Districts expected a similar pace of price increases in the coming months. Consumer prices continued to move up due to solid demand and rising costs, though several Districts noted greater price sensitivity by consumers than in the prior report.”